Rescuing the euro zoneEveryone wants to save the euro. The question is how. And how long.

European Central Bank chief Mario Draghi sparked a global market rally Thursday by promising to do whatever is necessary to rescue the euro, the currency shared by 17 nations hobbled by a debt crisis and, in some cases, economic collapse.

A day later, German Chancellor Angela Merkel and French President François Hollande echoed his comments, saying they, too, will do everything they can to preserve the currency union amid mounting speculation that Greece will quit the group and that Spain is headed to a full-scale bailout.

But there are problems. First, promises in the euro zone have proved to be empty time and again over the past two years. As in, I'll believe it when I see it.

Then there's the issue of how they'll save anything. The way the markets saw it, Mr. Draghi hinted that the central bank could intervene to buy Spanish and Italian bonds, thus driving down their yields from prohibitive levels. That, he suggested, would be within his mandate, and now all eyes are on the next ECB meeting next week.

But the Bundesbank told reporters Friday it remains opposed to a bond-buying scheme, so what happens next is anyone's guess. Some observers believe the Bundesbank will come onside, and the ECB will again buy bonds.

"We still don't know how they'll actually save the euro, but reports in Le Monde hinted that the ECB was preparing to go shopping in the Spanish and Italian bond markets, which would keep everyone happy for a while at least," said market analyst Chris Beauchamp of IG Index in London.

"Next week's ECB meeting provides the ideal point for Mr. Draghi to put some weight behind his words, so markets will be hoping he uses the chance wisely."

There's also the issue of how much can be achieved, even if the ECB and Europe's bailout fund intervene.

"That might help Spain and Italy fund at somewhat lower rates in the near term, but its limited and temporary nature could see bond markets start to reinstate bets against the weaker peripheral countries, particularly if Spain’s economic slide continues," said chief economist Avery Shenfeld of CIBC World Markets.

"We likely haven’t seen the last of global risk jitters over the euro zone."

Social media stocks sinkShareholders of companies like Facebook Inc. and Zynga Inc. can be forgiven if they're feeling less than social today.

They lost a lot of money this week as their stocks plunged.

Facebook shares tumbled Friday, continuing a slide from Thursday, after it posted its first quarterly results as a public company. It's now well below the May IPO price of $38 (U.S.).

Facebook reported a 32-per-cent increase in second-quarter revenue, and met the estimates of analysts, but that still wasn't enough for shareholders worried about the company's slowing growth.

Facebook revenue climbed to $1.18-billion from $895-million a year earlier, marking the slowest growth since early last year, while ad revenue rose 28 per cent to $992-million, or 84 per cent of the total.

Facebook lost $157-million, or 8 cents a share, compared with a profit of $240-million or 11 cents a year earlier. Stripping out charges brought earnings per share to 12 cents. Its operating profit margin eroded to 43 per cent.

Zynga, in turn, sank to a loss in the second quarter, and lowered its forecast for the year, putting part of the blame on Facebook.

“Facebook is in the early stages of an important transition in its advertising business that should drive accelerating growth and margin expansion over time.” Analysts at JPMorgan Securities

China strikes Nexen dealChina moved this week to take a bold step into Canada's oil patch in its quest to become a resources giant.

CNOOC Ltd. struck a $15.1-billion (U.S.) deal for Canada's Nexen Inc., which would mark the biggest acquisition to date by China for a foreign company.

The $27.50-a-share cash deal needs the green light from several quarters, but there are suggestions it will be approved in Canada.

“We are in Canada to invest,” CNOOC chief executive Li Fanrong told reporters in a conference call on Monday. “We intend to be a local company as much as a global one.”

There was one sign of trouble, however, that could catch Canada up in the ongoing tensions between China and the United States.

U.S. Senator Charles Schumer asked Treasury Secretary Timothy Geithner, who chairs the Committee on Foreign Investment in the United States, to use the deal to pressure Beijing to open its markets.

I sincerely hope the CNOOC-Nexen deal can be approved, and that Chinese companies will continue to increase their investment in the United States," he said in a letter to Mr. Geithner.

"But I urge you not to miss this opportunity - the largest foreign acquisition ever by a Chinese company - to hold China to the commitments it has made to provide a level playing field for U.S. companies seeking to access Chinese markets."

What to watch for next weekThe focus this week will be on what, if anything, the central banks of the United States and Europe decide to do about the economic malaise.

The Federal Reserve announces its decision Wednesday, followed by the ECB on Thursday.

Markets want the Fed to unveil another round of stimulus in the form of quantitative easing, dubbed QE3, while, as mentioned above, they're looking for the ECB to act on the euro crisis.

Chairman Ben Bernanke and his colleagues at the U.S. central bank are widely seen as acting at some point, though some expect it won't be this round.

They need to do something given Friday's reading of the U.S. economy, which showed growth slowing to an annual pace of just 1.5 per cent in the second quarter, nowhere near enough to ease America's jobs crisis.

"We judge that it’s only a matter of time before the Fed eases again, faced with the prospect of a flat-to-mildly-rising unemployment rate through next year," said senior economist Michael Gregory.

And, with looming November elections, it might be more convenient to move sooner rather than later (although we don’t believe the political background would stay the Fed’s hand)."

Wednesday's decision precedes Friday's key jobs report, which is expected to show job creation of about 100,000 positions in July, and an unemployment rate of 8.2 per cent.

"It’s likely only a matter of time before the unemployment rate starts drifting up, although it should still round out to 8.2 per cent in July, for the third month in a row," Mr. Gregory said.

At home, Statistics Canada is expected to report Tuesday that the economy expanded by 0.2 per cent or 0.3 per cent in May, on the heels of April's 0.3 per cent.

"Helping to boost growth, a return to normal seasonal temperatures could have seen a rise in utilities production, surprisingly absent from the prior month’s reading," said Emanuella Enenajor of CIBC World Markets.

"Wholesaling and retail volumes were also supportive that month, with the latter rebounding after a soft start to the quarter," she added in a research note.

"Factory production probably made only a modest contribution to growth due to weakness at refineries, while a late-month rail strike may not have had much impact on activity, based on existing indicators. Protests in Quebec saw an early end to the school year, likely hitting educational output; however, growth elsewhere could have been enough to lift activity by 0.3 per cent, matching the prior month’s clip."

Required reading this weekThe London Olympics are a critical test of BCE Inc.'s two-year, multibillion-dollar makeover and its “watch anywhere” strategy that delivers television broadcasts not only to the living room, but to smartphones, tablets and any other sort of screen a customer happens to be watching at the moment. Steve Ladurantaye reports.

Barrick Gold Corp. announced a massive cost overrun and one-year delay at its key Pascua-Lama gold project, as the world’s biggest gold miner struggles with soaring industry costs that are also forcing it to shelve other large projects in the pipeline. Pav Jordan reports.

Not even the large-scale construction, hiring and other spending associated with the Olympic Games has managed to lift Britain out of its deepening economic funk. Brian Milner, Paul Waldie and Eric Reguly report on Britain's deepening recession.

The U.S. housing market is finally awakening from its six-year nightmare, Joanna Slater reports from New York. After suffering through years of falling prices and moribund sales, the market is witnessing a rise in home values and a burst of new construction.

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